Osram to close manufacturing site for traditional products in Indonesia

2013/05/08

Osram will shut down its production site in Tangerang, Indonesia, latest at the end of December 2013, as the company continues to push ahead with its corporate realignment. In Tangerang, Osram manufactures traditional products, mainly incandescent lamps, with some 1,100 employees. The move is part of the company’s reorganization program initiated in 2012 and targets cumulative gross savings of about 1 billion euros by 2015.

The products manufactured in Tangerang are sold not only in Asia but worldwide. The regulatory framework coupled with the technological change underway in the lighting industry means that the traditional incandescent lamp is disappearing from the market in more and more regions around the globe. Not least because of this, Tangerang recently recorded declining production volumes, while costs were rising. A turnaround is not in sight as demand for traditional lighting products is expected to decrease further.

By contrast, demand for semiconductor-based lighting sources, especially for light-emitting diodes (LED), is rising. Osram estimates that LED penetration of the lighting market will accelerate in the coming years. In 2011 it accounted for 9 percent of the general lighting market, by far the biggest lighting segment globally. This share is expected to increase to nearly 70 percent by 2020 according to a study by McKinsey.

Osram is building up capacities in this future-oriented business area. This includes an investment over 100 million euros in a new LED assembly plant in the Chinese city of Wuxi. Osram views Asia as the most important key market of the future, especially with regard to the expected LED development in the region.

ABOUT OSRAM

OSRAM of Munich, Germany is one of the two leading light manufacturers in the world. The company's portfolio covers the entire value chain from components – including lamps, opto semiconductors like light-emitting diodes (LED) – to electronic control gears as well as complete luminaires, light management systems and lighting solutions. OSRAM has around 39,000 employees worldwide and generated revenue of 5.4 billion Euros in fiscal year 2012 (ended September 30, 2012). More than 70 percent of its revenue comes from energy-efficient products. The company's business activities have been focusing on light – and hence on quality of life – for over 100 years. Additional information can be found in the internet at www.osram-group.com

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